#131: Leading Transformation and Redefining the Logistics Sector

#131: Leading Transformation and Redefining the Logistics Sector Featured Image

Shekar Natarajan is the Chief Supply Chain Officer for American Eagle Outfitters and has been with the company for quite a few years. He has done pretty much all the different scopes and roles within supply chain with a great impact. He’s had a long-standing career within supply chain. He has worked for several very large FMCG companies earlier in his career, including Coca-Cola, Pepsi, and AB InBev. He also made significant things within very large retailers such as Walmart and Target.

Now he’s driving some extremely interesting projects within the American Eagle Outfitters supply chain, including the acquisition that they’ve made to Quiet Logistics and AirTerra. They are creating a sharing platform where logistics and supply chains can be looked across different retailers and different brands.

Listen to the full discussion here:

  • Stream by clicking here.
  • Download as an MP3 here.

 

 

Connect with the Guest:

Shekar Natarajan: LinkedIn

Some of the highlights from the podcast:

  • Why Shekar’s career was a series of accidents
  • How did Shekar convince AEO’s CEO of significant acquisitions within the supply chain and logistics sector
  • Building the Shopify of Logistics and how will it work
  • Why should brands and retailers collaborate on supply chain
  • Dogged persistence and the keys to success

Show notes:

  • [01:14] Tell us a bit about your career and tell us how you made the changes that you made.
  • [02:57] We have to think very differently about how we store, how we package, and how we basically move the product through the supply chain into the customer’s shelves. I am very fortunate to have worked in Coca-Cola and lead the transformation.
  • [05:05] PepsiCo recruited me and I did not want to do anything that I did with Coca-Cola. So I started on the plant side and on the production side. 
  • [06:02] Disney was trying to build out primarily, an integrated supply chain. So primarily, all of the business and the business divisions were run very autonomously. 
  • [07:23] I was basically tapped to join the next generation supply chain team, primarily, this was the team focused on redefining the supply chain of the future for Walmart. 
  • [10:01] How do you become competitive from a last-mile capability perspective? And that’s where I had the moment of reflection that led me to create something like the Shopify of logistics. 
  • [11:50] American Eagle Outfitters has approved some significant acquisitions within the logistics and supply chain space. How did you convince the CEO to do that?
  • [14:41] With American Eagle, I was very fortunate. It was not just the CEO, it was also our CFO, our COO, and the board who saw this vision. They saw this vision and they said that logistics is going to be a key advantage for the company, but hyperscale logistics would be a competitive advantage.
  • [16:58] 11% of the price went up in the parcel delivery system and we were able to leverage our delivery by 300 basis points. We were also able to reduce the time it took for the end deliveries to be a day and a half faster than everyone else.
  • [18:40] We were able to convince the board- it’s a wonderfully progressive board and we’ve made a lot of unique bets. It has a history of innovation and they basically bought into the vision. We were able to successfully kind of transact with these companies to buy them and basically build out an incubator business within our business. 
  • [23:56] What we are trying to do is basically take every one of our workflows and make it open source. So, our game is to be able to get to a similar scale like in a closed network without having to make similar investments.
  • [25:36] What we’re trying to do is match all these different, categories of products, use a very efficient way to open source them, and build a network that basically brings access and scale closer to the doorstep.
  • [27:16] There is a certain reluctance among competitors to share or collaborate too much. In using your platform, somebody might think, how do I make sure that my product also reaches my customer and you don’t get priority over mine or something like that. How do you address this type of potential challenge?
  • [32:20] When you’re competing, you don’t have to compete on all the dimensions that make you unique on the value chain, the only things that matter are product related. And so that is the same concept we are extending in the supply chain.
  • [34:30] We have a very unique demographic and 99.5% of the customers don’t even like like, you know, companies don’t even overlap with us. 
  • [36:20] Looking back at your series of accidents in your career, what would be one or two principles that helped you the most that you want to share maybe with the younger side of our audience? What would be one or two pieces of advice for a successful career?
  • [38:07] If you feel liberated, that basically like you have nothing to lose, and you have dogged persistence, that is the recipe for success, that’s number one that you need. 
  • [40:15] Don’t chase success because you want people to know that you’re successful, be successful because you want to be successful in your life.

Related Episodes:

#127: The EV Boom and Building the Supply Chain for it

#128: How Supply Chain helped PMI become an electronics focused company

#129: IBP Journey for Vestas

Quotes from the Episode:

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